For many companies, it's a rare thing to pay a published fare for an international business-class ticket, since a key component of their managed travel programs is leveraging volume to secure airfare discounts. While a slew of new promotions by airlines on international business class fares on the surface appear attractive--potentially priced well below the corporate rates a company has negotiated--they generally are too restrictive to work for many international business travelers.
That the airlines' best customers are unlikely to take advantage of special fares and promotions for international business class hasn't stopped carriers from offering them. Some recent deals offer fares as much as 70 percent lower than rates for last-minute business-class travel, provided travelers book their tickets months in advance.
United Airlines and Lufthansa last month, for example, announced one-way business-class fares for travel in November as low as $597. The promotion is restricted to a handful of dates and requires a 30-day advance purchase. American Airlines launched a business-class sale last month to celebrate the launch of service between New York JFK and London Stansted airports, with one-way fares as low as $1,365.
Given the soaring price of transoceanic air travel, such promotions can frustrate corporate travel managers tasked with containing costs and keeping travelers within the confines of preferred travel management processes.
"It's very common now to see special advance purchase fares, or very restricted business-class fares that are discounted," said Lasse Leskinen, manager of airline and vendor contract compliance for New York-based advertising and marketing services conglomerate Interpublic Group. "It's fine and dandy for a smaller corporation that wouldn't be able to negotiate ... but for us, we have very strong global contracts and so we're in a different boat."
Even if Interpublic wanted to take advantage of a restricted fare sale, it could potentially backfire and end up costing the company more money then it would have spent by using its negotiated rate. Leskinen recalled a British Airways restricted fare sale that carried a 20 percent penalty for any changes to the ticket.
"I would end up paying more for a change in penalties than using my original contract," he said. "I don't see us changing our policy to ask travelers to make advance purchases, and I doubt that any of the bigger corporations would do that, either. It restricts it too much."
Indeed, if a company often needs to change travel plans, it is probably not a good candidate for promotional fares. But for a small company without weight in negotiations, or for a large company whose travelers know their schedules well in advance, promotional fares could help bring down travel costs.
Promotions and discounts for business class tickets on transatlantic routes nowadays seem prevalent due in large part to increased competition from such new, all-premium carriers as Eos, Silverjet and MaxJet, said Christopher Staal, vice president of global sourcing strategies for Stamford, Conn.-based The Thomson Corp.
While some corporate clients make use of promotional fares for international travel, said Bruno Peynichou, American Express Business Travel vice president of global distribution strategy, doing so may affect market share commitments and other arrangements with contracted suppliers.
"Those promotions--one-off--might be better, but then you do not get your year-end rebate," he said. Peynichou noted that Amex now has "simulations at the point of sale" that help travelers understand the impact of rebates and whether to select promotional fares offered by non-preferred airlines.
Such considerations are well worth the effort, suggested Bob Brindley, vice president of the Americas for BCD Travel's Advito consultancy, though buyers should bear in mind that discounts may not be as dramatic as they first appear. Oftentimes, a carrier will compare its promotional fare to the highest published fare on a given route, he warned, but many promotions are restricted to certain dates and therefore should be compared to off-peak published ticket prices.
"You really need to be on the lookout for the lowest possible fare in the market that works for the type of trip you want to take," Brindley said. "If you can live with the restrictions that come along with it, you could use them in a way that would lower your average trip cost. It shouldn't affect your preferred program because the carriers are very competitive and there should be that low fare available on your preferred carrier, as well. You shouldn't have to pay more to support your preferred carrier."
Biopharmaceutical company Gilead Sciences Inc. requires its business travelers to use the lowest fare available in the approved class of service, according to global travel manager Rick Wakida. When a promotion fits those guidelines, it can be used, he said, but restricted fares are handled on a case-by-case basis rather than written into Gilead's travel policy. The company's travel office is instructed to notify travelers of potential ticket change and cancellation costs.
"In most cases, the discounts that we have on our contracted carriers usually result in the lowest applicable fares," Wakida said. "There have been instances where we've taken advantage of advance-purchase business class fares, so we have been able to lower the costs. However, we have not changed our policy to try and increase that usage. It's just the circumstances of booking."
Wakida added that non-refundable tickets can be problematic when booking on "second-tier carriers" because frequency limitations mean less opportunity to reuse those tickets.
Promotions and sales for restricted business-class fares also can present other management issues. For example, any sale that tempts travelers to book directly with airlines or via third-party Web sites--rather than through approved booking channels--would prevent those travelers from seeking support from their designated travel agency. Travelers would not receive the proper assistance for changes and cancellations, after-hours help and other services. More importantly, unauthorized bookings complicate their companies' efforts to track them and contact them in a emergency.